MoneyGram is the second largest provider of money transfer services in the world. The company announced it has partnered with Ripple to test their technology for international transfers. The objective of the pilot project is to increase the efficiency of the company’s services.
Both companies have officially announced the partnership on their official websites. The strategic alliances between the companies will start with a pilot project which will use the Ripple’s cryptocurrency, XRP, to reduce costs and improve the speed and the flow of payments in the MoneyGram’s system.
Likewise, the integration of the MoneyGram’s system into the Ripple platform will be evaluated during the project. By using Ripple’s xVia payment feature and XRP, MoneyGram will make use of the Ripple’s payment infrastructure created for payment providers and other financial institutions that are trying to minimize the liquidity costs.
In essence, MoneyGram is trying to optimize their international payment services and improve the experience for its users. It seems the pilot project will be tested internally, without the participation of the users, according to a tweet published on the MoneyGram’s official Twitter account.
In the cross-border payment sector, the majority of the current systems require the payment processing companies to use accounts with funds to maintain the liquidity and process the payments as fast as possible. The blockchain technology eliminates many steps in the process and intermediaries which only make the process longer.
Brad Garlinghouse, the CEO of Ripple said: “The inefficiencies of the global payments are not only affecting the banks, but also institutions such as MoneyGram. The companies for money transfers are incredibly important because they help people send money to their friends and loved ones. We are enthusiastic about this pilot project and the strategic long-term alliance with MoneyGram.”
In 2016, the international payments market was used to move almost 600 billion US dollars between the family members who live in different countries or was transferred for commercial purposes, according to Ripple.
MoneyGram says the aforementioned services for international payments could be performed faster and with less costs in the near future. The Executive Director of MoneyGram, Alex Holmes, said: “Ripple is at the forefront of the blockchain technology and we expect to pilot xRapid. We hope it would increase the efficiency and improve the services offered to the clients of MoneyGram.”
The newest alliance with MoneyGram is another one of the strategic partnerships that Ripple formed in recently. The list now includes more than one hundred financial institutions and banks from around the world, including American Express and Santander.
Ripple quickly became one of the cryptocurrencies with the largest growth in 2017. At the end of December last year, Ripple took over the second position on the cryptocurrency from Ethereum with the price of 2.84 dollars. Currently, it is on the third position with the price of around two dollars.